Intel is the latest AI chipmaker to buckle under the weight of massive expectations

• Intel stock plunged on Friday after it reported earnings after the bell on Thursday.
• The chipmaker beat revenue estimates but issued soft guidance.
• It said manufacturing issues are hindering its ability to meet demand for its products.

The move: Intel stock fell 17% on Friday. The chipmaker is up 23% year-to-date and up 119% in 12 months.

Why: Intel's drop comes after its latest earnings results missed investors' lofty expectations.

While the company slightly beat analysts' estimates for both adjusted earnings per share and revenue, it issued soft sales guidance for the quarter. The company said it expects revenue between $11.7 billion and $12.7 billion for the current quarter, below expectations of $12.51 billion.

Intel CFO David Zinsner attributed the tepid guidance to the company's inability to keep up with demand for its products, citing production issues. He told CNBC that he expects this issue to improve in the coming quarters, but CEO Lip-Bu Tan said on the chip maker's earnings call that a true turnaround would require "time and resolve."

What it means: Intel's stock drop comes as investors are laser-focused on what's next for the AI trade. For Intel specifically, while the nod to high demand is encouraging, investors are concerned that the company's turnaround isn't happening as fast as they hoped.

The stock has been on a wild journey in the last year, with the Trump administration taking a 10% stake and Nvidia pouring $5 billion into the company, which provided a fresh boost to the beaten-down shares. But Intel executives' comments on the earnings call suggest a longer road ahead before its turnaround is complete.

While the move down on Friday was company-specific, rather than an indicator of the wider AI trade, it's also a reminder that many high-flying tech and AI names are priced to perfection, and any miss on expectations is enough to send the stock tumbling.